US stock futures slip as investors weigh Middle East war fallout

March 5 (Reuters) – U.S. stock index futures edged lower on Thursday as investors digested the widening fallout from an intensifying Middle East war, after markets staged a tentative bounce a day earlier.

Iran launched a fresh wave of missiles toward Israel earlier in the day, just hours after efforts in Washington to halt the U.S. air assault ran into a wall.

Safe-haven gold and the dollar kept climbing, while U.S. Treasuries cooled, pushing the 10-year yield to its highest level since early February.

Oil, after surging more than 3% on the day and jumping over 15% so far this week, extended its rally as the conflict entered a sixth day, keeping fears alive that higher energy costs could bleed into the broader economy and muddy an already uneasy outlook for the Federal Reserve.

At 02:40 a.m. ET, Dow E-minis were down 185 points, or 0.38%, S&P 500 E-minis were down 14 points, or 0.2%, Nasdaq 100 E-minis were down 62.75 points, or 0.25%.

Even with nerves frayed by the prospect of a prolonged conflict and inflation worries reignited by pricier fuel, investors have been quick to rotate back into tech. The Nasdaq has climbed 0.6% so far this week as bargain-hunters scooped up technology names that drove much of the selloff this week and were hit hard last month. The S&P 500, meanwhile, hovered slightly lower.

The slight rebound on Wednesday was powered again by tech stocks. The Nasdaq jumped 1.29%, the S&P 500 gained 0.8%, and the Dow ended 0.5% higher. Helping calm sentiment were reports of Iran’s openness to talks and U.S. President Donald Trump’s pledge to keep oil markets steady.

The rally also drew support from fresh data suggesting U.S. economic activity is holding up, alongside government officials playing down the inflation hit from a spike in oil prices.

Next up, markets will parse weekly jobless claims later in the day, before turning to non-farm payrolls report on Friday.

Investors will also be scanning for fresh Fed signals after a run of hawkish commentary, with remarks from U.S. Fed Vice Chair Michelle Bowman due later in the day.

(Reporting by Pranav Kashyap in Bengaluru; Editing by Sherry Jacob-Phillips)